The downturn caused disposable diaper and training pant sales to fall almost 6% from April 2017 to 2018, according to Nielsen's most recent brick-and-mortar retail scanner data.

"This new reality is beginning to take a substantial toll," said Svetlana Uduslivaia, the head of industry research at Euromonitor International. The diaper slump will probably be the "normal for the foreseeable future."

Huggies or Pull-Ups account for about a third of the company's $18 billion in sales, according to AllianceBernstein analyst Ian Gordon. (Kimberly does not break out diaper sales.)

Pampers are P&G's top-selling brand, bringing in more than $8 billion a year. The conglomerate's baby care unit was its second largest business in 2017. It made up 14% of P&G's $65 billion worth of sales.

Huggies and Pampers have cornered the market by convincing parents that their diapers are the safest and most reliable for newborns and toddlers.

Last year, P&G controlled 43% of the market and Kimberly grabbed 35%, according to Euromonitor.

"Parents are extremely brand loyal when it comes to products for their kids," said Morningstar analyst Erin Lash. "If a diaper works and you don't have accidents or issues when you're out with your child, you probably will stick with it."

"If you have multiple children, and it works for one kid, you're going to start there for your second child," Lash said.

Diapers are also a profit windfall for the companies because they're expensive and parents repeatedly need to restock.

"There aren't as many expenditures for a household as big as diapers," said Leonard Lodish, a professor emeritus at the Wharton School of Business and an early investor in Diapers.com, the online startup founded by Marc Lore.

Parents can spend more than $700 on diapers for babies during the first year of their lives, Uduslivaia said.

Pampers Pure

P&G has taken several successful steps to respond to the demographic changes.

The company has extended its reach to parents concerned about diaper materials and ingredients.

In February, it unveiled Pampers Pure diapers and wipes, a "natural" collection with zero fragrance, lotion or chlorine. Pampers Pure will compete with Unilever-owned Seventh Generation and Jessica Alba's startup Honest Company, brands that have gained traction with eco-friendly marketing.